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To: Dale Baker who wrote (66388)10/7/2008 9:36:21 AM
From: Paul Kern
of 118460
 
Lots of swaps around -- not just on debt.

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To: Paul Kern who wrote (66392)10/7/2008 9:40:45 AM
From: Dale Baker
of 118460
 
True, I was just using the most visible example lately but swaps on bonds and equity in companies that went BK are another big problem.

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To: tom pope who wrote (66389)10/7/2008 9:59:36 AM
From: Dale Baker
of 118460
 
If I didn't already have a good slug of IDG I would add here. I scan the news wires every day and can't find anything about them facing any pressures.

I trimmed a few extra QBE at $20, just to insure that 17 print was BS.

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To: Dale Baker who wrote (66394)10/7/2008 10:10:21 AM
From: tom pope
of 118460
 
TED spread is looking better.

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To: Dale Baker who wrote (66394)10/7/2008 10:31:56 AM
From: Keith Feral
of 118460
 
I think it's early to looking at Euro financials. RBS is on the brink of disaster, and Europe needs to do something more than guarantee bank deposits to create any confidence. They haven't even entered the first inning of the cleanup phase.

OTOH, most of the systemic problems in the US have been fairly well addressed. WB is still up in the air, and there are still some bad earnings to get through this month. Fortuntely, the US has set up most of the backstops to prevent a free fall. Hopefully, we can just grit our teeth and get through the fourth quarter without any more disasters.

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To: Keith Feral who wrote (66396)10/7/2008 10:35:17 AM
From: Dale Baker
of 118460
 
Yes, Europe hasn't clearly labeled the winners and losers at this point, so there is still confusion where I see BCS and ING constantly called survivors and winners, but their names get grouped in by sector association when the bad news and worries come out too.

We won't see much buying in the potential winners until the divergence is clear.

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To: Dale Baker who wrote (66388)10/7/2008 10:52:01 AM
From: Keith Feral
of 118460
 
CME is starting a clearing exchange for CDS products. That might start to put level out some of the volatility behind the insane CDS spikes. Personally, I think the whole CDS market is an outright scam since no one really has the capital to absorb the losses.

IMO, the biggest sense of urgency behind FED cuts is to prevent more foreclosures as Libor rates have surged over the past month. It's kind of amazing the FED is dragging their feet to deliver another rate cut.

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To: Keith Feral who wrote (66398)10/7/2008 10:57:26 AM
From: Dale Baker
of 118460
 
Agree on the CDS market, it never should have been allowed to grow by the regulators.

As for foreclosures, TARP will start buying stuff next week. One key component will be that mortgages bought by TARP can immediately be turned over to FHA for refinancing. That would reduce foreclosures by several hundred thousand in the next few months from what I read.

A coordinated worldwide rate cut also seems inevitable.

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To: Keith Feral who wrote (66398)10/7/2008 10:59:40 AM
From: KyrosL
of 118460
 
A Fed rate cut before credit markets thaw out not only will do nothing to help, but may in fact make the situation worse, because it will be seen as grasping at straws. The US already has by far the lowest Fed funds rate, with the exception of Japan.

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To: KyrosL who wrote (66400)10/7/2008 11:01:38 AM
From: Keith Feral
of 118460
 
If there is not a FED cut, credit markets will get worse since higher mortgage payments will make the housing situation worse.

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